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Show ill 2 5jf?S Inflation hurts because--- Almost everyone that earns an average income has been facing the heavy impact of the current inflationary in-flationary cycle. The unfortunate addition to this problem is the psychological impact which compounds com-pounds the inflation. For example: From 1948 to 1973 American employee productivity increased at about 3 percent per year 75 percent over 25 years. During that period the highest rate of inflation never exceeded productivity by more than 1.5 percent. In 1979, however, while inflation was rising at an annual average of 13 percent, American employee productivity dropped by one percent. The result was higher prices for goods and services because it took more manpower to produce the same products and services. Another interesting statistic shows we're falling behind in our average annual income. From 1950 to 1970 income in-come grew at 3.2 percent per year. But from 1970 to 1980 income slowed to one percent per year while the yearly average inflation rate for the 70's was over 8 percent. 50 years ago federal, state and local government spent about 10 percent of the gross national product. Last Year these bureaus; agencies, and commissions com-missions spent 32 percent of our total national ouptut. In 1929 welfare payments consumed 3 percent of national income, but by 1979 it had risen to over 20 percent. Social CAPITOL WATCHDOG By Bill Hendrix welfare spending as a portion of the federal budget beats its next closest rival, defense, 4 to 1. From 1970 to 1980 the volume of federal regulation exploded. In total pages for the ten year period regulation increased 360 percent. And for each of these regulations there is an additional expense to business which passes the price increase on to the consumer. Energy increases are almost too staggering to calculate. In fact, energy increases in one year, 1979, often exceed ex-ceed ten years growth in costs for many other consumer items. These figures, when added to inflation in-flation rates of nearly 20 percent show why its so hard to make ends meet. More and more families are forced to rely on two incomes, or more, to survive. sur-vive. Government, itself, has become part of the problem. With every one percent increase in inflation the federal government reaps one-and-a-half percent in taxes. Because wages and income to up with inflation, workers are forced into even higher tax brackets requiring more of their income to pay taxes. The majority of Congressmen refuse to recognize this simple fact. As a result there has been no tax relief for this cruel extortion. It is a vicious problem that must be resolved soon or it'will break the back of the free enterprise system and destroy the spirit of Yankee ingenuity. |